Talen Energy Supply restructuring and $1.76 billion DIP financing
Davis Polk is advising the lead arranger, administrative agent and collateral trustee under the $1.76 billion superpriority debtor-in-possession credit facilities for Talen Energy Supply, LLC and its subsidiaries (“Talen”), and the collateral trustee and administrative agent under Talen’s prepetition revolving credit facility.
On May 9, 2022, Talen and certain of its subsidiaries initiated voluntary chapter 11 proceedings in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. In connection with the chapter 11 filing, the agent and lenders under Talen’s prepetition revolving credit facility arranged the DIP financing, which consists of a $1 billion new-money term loan and $300 million revolver, as well as the postpetition continuation of Talen’s $458 million letter of credit facility.
Talen, which is headquartered in The Woodlands, Texas, employs over 2,000 individuals and operates 18 power generation facilities across the country, which generate power using a variety of fuels, ranging from zero-carbon energy like nuclear to gas, coal and oil. Its facilities are capable of producing approximately 13,000 megawatts of power. Talen is also investing in a zero-carbon digital currency mining operation, seeking to develop up to 300 megawatts of digital currency mining capacity, powered by its zero-carbon digital infrastructure campus adjacent to its Susquehanna nuclear power generation station in Berwick, Pennsylvania.
The Davis Polk restructuring team includes partner Damian S. Schaible, counsel Erika D. White and associates David Schiff, Nate Sokol, Timothy H. Oyen and Hailey W. Klabo. The finance team includes partner Kenneth J. Steinberg, counsel Andrei Takhteyev and associates Jason Palios and Sam Dilthey. All members of the Davis Polk team are located in the New York office.